Lifting fee definition
/What is a Lifting Fee?
A lifting fee is the transaction fee charged to the recipient of cash transferred through a wire transfer, which the recipient's bank or an intermediary bank imposes for handling the transaction. The term also applies to foreign bank processing fees, which may be applied to a variety of other financial transactions besides a wire transfer. Some banks charge lifting fees to recipients that are clearly excessive, in comparison to the service performed.
Since it is difficult to determine in advance the amount of a lifting fee that will be charged, the agreed amount of a transfer may cause confusion between the payer and payee, since the payee is clearly not receiving the expected amount.
Example of a Lifting Fee
As an example of a lifting fee, a company sends a wire transfer for $10,000, where the sender’s bank is Bank A (in the United States), the receiver’s bank is Bank B (in Germany) and an intermediary bank is Bank C. Bank A charges a fee of $25 to initiate the transfer, while Bank C charges a $20 lifting fee for handling the transaction through its system, and Bank B charges a $15 lifting fee for crediting the funds into the recipient’s account. The sender pays $25 up-front to Bank A, while the recipient sees a total of $35 deducted from the transferred amount. This means that the recipient receives $9,965 in its account, after the $35 of lifting fees are extracted.
Lifting Fee Best Practices
Before setting up an account at your bank, be aware of its fee structure. This structure may include a lifting fee for received wire transfers. If you expect to receive a large number of wire transfers, it may make sense to set up your account with a different bank, or to negotiate with the bank to delete this fee.